PM turns down proposal to convert TCB into a plc
Monday, 4 January 2010
Nazmul Ahsan
The government has turned down a proposal to convert the Trading Corporation of Bangladesh (TCB) into a public limited company (plc) and offer its 30 per cent stake to general investors, officials in the Prime Minister's Office (PMO) said.
The proposal was made to help strengthen the market intervening capacity of the state-trading agency, a source in the Ministry of Commerce (MoC) said.
The TCB, without having adequate autonomy in policy making, has not been able to intervene in the market, particularly when prices of essentials record abnormal increase for domestic or external factors, he added.
Prime Minister (PM) Sheikh Hasina, while examining a set of proposals submitted by the MoC to strengthen the TCB, rejected the proposal to convert the agency into a public limited company.
However, the PM has approved the proposal to increase the number of board of directors of TCB from the existing two to five and allowed the corporation to export a number of products.
"The PM has rejected our proposal to make the TCB a public limited company and offload a part of its stakes," a high official in the MoC told the FE on Sunday.
"We are frustrated as the market intervention by the TCB with its present manpower and rules of business is not possible."
The MoC proposal was in line with the State Trading Corporation of India Ltd and Sri Lanka State Trading (General) Corporation Ltd.
It also proposed to conduct valuation of assets and liabilities of TCB prior to conversion of the corporation into a plc, sources said.
To make the TCB into a company, the MoC proposed to formulate new Memorandum of Association and new Articles of Association. It also proposed to offload 30 per cent share of TCB through stock exchanges, preserve 10 per cent shares for the staff of TCB and retain the majority 60 per cent share with the government.
Furthermore, the Ministry proposed to recruit expert manpower from private sector to infuse dynamism into the state-trading agency.
The officials in the MoC, however, could not give any concrete idea about how the TCB will be involved in export activities.
Both the Commerce Minister Faruk Khan and the TCB Chairman time and again promised to strengthen the agency.
The proposals of the MoC, forwarded to the PM for approval, were based on recommendations made by an inter-ministerial committee, sources said.
The TCB was established in 1972 with a six-member board of directors including its Chairman. However, the number of board members was reduced to two in 2002. The manpower of TCB was downsized to 340 until 2002 from its original strength of 1406.
Presently, the TCB has only 166 staffs, including one director and 24 first class officers.
The government has turned down a proposal to convert the Trading Corporation of Bangladesh (TCB) into a public limited company (plc) and offer its 30 per cent stake to general investors, officials in the Prime Minister's Office (PMO) said.
The proposal was made to help strengthen the market intervening capacity of the state-trading agency, a source in the Ministry of Commerce (MoC) said.
The TCB, without having adequate autonomy in policy making, has not been able to intervene in the market, particularly when prices of essentials record abnormal increase for domestic or external factors, he added.
Prime Minister (PM) Sheikh Hasina, while examining a set of proposals submitted by the MoC to strengthen the TCB, rejected the proposal to convert the agency into a public limited company.
However, the PM has approved the proposal to increase the number of board of directors of TCB from the existing two to five and allowed the corporation to export a number of products.
"The PM has rejected our proposal to make the TCB a public limited company and offload a part of its stakes," a high official in the MoC told the FE on Sunday.
"We are frustrated as the market intervention by the TCB with its present manpower and rules of business is not possible."
The MoC proposal was in line with the State Trading Corporation of India Ltd and Sri Lanka State Trading (General) Corporation Ltd.
It also proposed to conduct valuation of assets and liabilities of TCB prior to conversion of the corporation into a plc, sources said.
To make the TCB into a company, the MoC proposed to formulate new Memorandum of Association and new Articles of Association. It also proposed to offload 30 per cent share of TCB through stock exchanges, preserve 10 per cent shares for the staff of TCB and retain the majority 60 per cent share with the government.
Furthermore, the Ministry proposed to recruit expert manpower from private sector to infuse dynamism into the state-trading agency.
The officials in the MoC, however, could not give any concrete idea about how the TCB will be involved in export activities.
Both the Commerce Minister Faruk Khan and the TCB Chairman time and again promised to strengthen the agency.
The proposals of the MoC, forwarded to the PM for approval, were based on recommendations made by an inter-ministerial committee, sources said.
The TCB was established in 1972 with a six-member board of directors including its Chairman. However, the number of board members was reduced to two in 2002. The manpower of TCB was downsized to 340 until 2002 from its original strength of 1406.
Presently, the TCB has only 166 staffs, including one director and 24 first class officers.